Leasehold and Freehold Reform Bill

Debate between Richard Foord and Stella Creasy

2nd reading
Monday 11th December 2023 Commons Chamber

[Stella Creasy]

As the Minister is nodding, he will know the amount of casework that small set of properties, only 24 flats, has generated for me over the years. To give some examples of the charges residents have faced, one was given an extra £1,500 bill and another was due to be evicted for being spuriously charged £5,000 by that company. It is not legally possible for those residents to withhold those payments and not lose their properties, so they had to try to find the money to pay, even though it was patently obvious that that egregious company was levying the charges as punishment for their having dared to exercise their rights. The only option open to them was to go to court.

Again, this legislation offers nothing to help support people in such a situation. It offers nothing to help support people when their freehold manager shifts the leasehold around to avoid them having the right to manage or even the right to buy their own freehold out. This company decided the private communal gardens could be turned into a public car park, opening up the entire estate and letting in huge problems with antisocial behaviour, all because it thought it could make a fast buck in the London area with a car park.

Y&Y then transferred the ownership of the building to Triplerose, a management company owned by Israel Moskovitz, who is part of Y&Y Management. Just the other week a resident came to me to point out that they had an onerous ground rent clause, which means that their ground rent has to be reviewed every five years against the retail price rate. That was not in the original lease but was added in. The owners of that property tried to sell the flat, and they asked whether they could vary that condition, because it was stopping them being able to sell it. Triplerose responded, demanding an immediate non-refundable payment to provide a quote—just a quote—for what it would cost to vary that condition. It then came back with a quote of £700 for an admin fee, £1,400 for legal fees and £8,000 for the premium.

[Richard Foord (Tiverton and Honiton) (LD)]

I have some casework that sounds similar to that which the hon. Lady is describing. It is at Pebble Beach in Seaton. A constituent wrote to say that she wanted to change the name on the deeds and introduce her partner’s name, and FirstPort wanted to charge her £540 just to get its approval. Does the hon. Lady agree that some of the leasehold companies we are talking about are charging Fortnum & Mason prices for services we might associate with Trotters Independent Traders?

[Stella Creasy]

I think even Del Boy had limits compared with some of the people we are talking about.

The Minister would probably say that in those circumstances the changes being made to ground rent should resolve the situation, and he would be right, but my broader point is that those residents have no redress. At the moment, the Bill does not come with forms of redress, and without redress it does not matter what rights people have because they cannot action them.

Those residents actually did go to a first-tier tribunal. They clubbed together, took on the risk and won—and understandably so, because if someone turns the private gardens into a car park, allowing people into the block, that does rather undermine the concept of service charges. They have been waiting three years for the compensation they are entitled to as a result of that ruling. Again, nothing in the Bill would change that. But that they went to a tribunal with a company with such a track record for doing these things over and over again, and that it meant nothing for future legislation and had no preventive effect, is perhaps the biggest and most important message Ministers should take from this debate. The fact that people cannot set precedent by winning a leasehold tribunal means that residents who live in blocks that are very similar go through the same fights again and again, and the same companies know they can get away with it again and again.

In any other legal situation there would be court precedent and opportunities for redress for our constituents. Surely, one of the things that we can do through the Bill is to change that and learn from other courts, because that “leasemin” is so time-consuming and stressful to so many of these people, and that is why they end up at our doorstep. Nobody wants to take on the risk of legal action if they can avoid it, especially if they have no guarantee that, even though the situation is patently unfair and somebody else has won a very similar case, that will make a difference.

We see it every single day. We see the people with repairs. I think of Hainault Court in my constituency, which has a freeholder of various names, including Freshwater, Highdorn and Daejan—it uses different ones all the time—where residents have spent hours of their lives trying to get the basic repairs that they pay their service charge for. They were charged £10,000 to replace a collapsed boundary wall. They got their own estimates, and it should have cost only £2,000 or £3,000. In a community where everybody is short of cash at the end of the month and every single penny counts, knowing that they have no alternative is a very poor place to be.

I wish I could say that situation is just in the private sector, but my own council was taken to court successfully by leaseholders over the charges being proposed for repairs and renovations in some of our local estates. Again, I hope that the Minister thinks about the right to manage, which is difficult to do in a block with a mix of social housing and leasehold property. In London, there are an awful lot of those properties, thanks to right to buy.

I also think of those people stuck with nothing to put any impetus on their property managers to do the right thing, even though they recognise that they need to do the right thing. I think of Hoffmans Road in my constituency, which is in that patch that Condé Nast is telling everybody to visit right now. The residents have no security on their building, because the doors do not work. The property company, Fexco, tells me that it is a problem for the developer, Taylor Wimpey. Taylor Wimpey, however, thinks it is for the property manager to use the money from the service charge to fix it. Nothing in this legislation will give those residents—my constituents—the ability to just get it sorted in the way that commonhold would.

We all have hundreds of examples. One thing that I have learned in this place over 13 years is that when we get these precious opportunities—when there is cross-party agreement that reform needs to happen—we should aim for the big reform, because we might not get the opportunity ever again. Nobody in this Chamber can defend freehold. Nobody can defend leasehold. We can all see the value in having a system that allows our constituents to have a direct voice. Goodness knows, I am sure for many of us it would cut the amount of casework we have, if nothing else. It would be a lot clearer what redress our residents have, before they have to go to court in the first place.

If we cannot have courts making precedent-setting rulings, can we at least look at how we can give our residents a stronger voice? For so many of them, it is the difference between a life well lived and a life lived in stress, wishing that they had never even bought the thing that they dreamed of, fought for and saved for longest of all. I had a cladding developer that said that it had put itself out of business so that it did not have to do the cladding; it was too small to be liable for it. Those residents are still waiting for redress.

All those issues tell us that this is not about a big-P political issue; it is about the day-to-day practical implementation. If we get this legislation right, we can solve so many headaches for so many people. I hope the Minister will not be Scrooge. I hope he will not be the Grinch. I hope he will think about what he can do for all those people sitting in those flats tonight, looking at the lump of coal that this legislation represents for them. Will he extend the Christmas cheer not just to those who might have been threatened by leasehold for houses, but to all those in leasehold flats right now? I know it would give everybody a very good 2024 if he did.